The economic problem of scarcity is a central theme in economics that arises because the resources available for the production of goods and services are limited, while our needs and wants for goods and services are unlimited. Scarcity deals with how people satisfy unlimited wants and needs with limited resources. Scarcity affects the monetary value people place on goods and services and how governments and private firms decide to distribute resources. The basic economic problem is about scarcity and choice, and every society has to decide what goods and services to produce, how best to produce them, and who is to receive them. Scarcity happens when the demand for a natural resource, product, or service exceeds the supply. Scarcity can be seen in real-life examples such as the limited availability of clean potable water in New Delhi. In economics, scarcity is defined as a situation where an items demand far outweighs its available supply.